Analyzing PepsiCo’s Marketing and Growth Strategies: The Effects of Recession on PepsiCo

Even during a widespread economic recession, when most companies are navigating a decline, some firms manage to find pathways to profit. It’s a fascinating paradox that even profitable companies can feel the ripple effects of a national economic downturn. In the recession time period you can consider to all companies in recline stage even some companies are gaining profit and their profits are also infected by the overall recession. Here I am going to do start my work on PepsiCo, its sale is infected by the competitors. The company’s market position is constantly being challenged, creating a high-stakes environment. Specially Coca Cola broken its sale and demand in the market. Cola Cola’s best strategy that they introduced some new products in the market with modern marketing techniques and it’s the reason that Pepsi’s demand fell down and people intend to buy Coca Cola’s products most frequently. Understanding these competitive dynamics is key to seeing the full picture. Pepsi’s maximum products are not frequently available at all regions, which presents a significant logistical and market penetration challenge.

Why is a marketing plan necessary?

A marketing plan is essential because it acts as a roadmap to boost your business and strategically cover different issues with respect to service, branding, and the product line. Having a clear, actionable plan provides direction and helps everyone on the team stay aligned with the same goals. Market plan use for both businesses who are already exists in the market and a new business that is going to start. Marketing planning can be contains one year tenure or sometime it takes 5 years time period. The timeline truly depends on the company’s strategic goals and the volatility of the market. Variety of actions are included in the marketing plan so every action takes much time to cover all the issues, for example situation analysis, SWOT analysis, marketing objectives and issues, marketing strategy, action items, financial budgets and forecasts, controls etc. Each of these components builds upon the last, creating a comprehensive guide for success. Marketing strategy is the base of a well written plan.

In this Essay I am going to discuss on PepsiCo’s marketing plan specially what methods and actions can boost up PepsiCo products while its competitor Coca Cola selling products frequently in the market and its marketing technique is more powerful rather than PepsiCo. The goal is to unpack the specific strategies that could help level the playing field. In short the main purpose of marketing plan is boost your companies sale, create a centre of attention to new customers and maintain old customers using the latest marketing trends. Retaining existing customers is often just as crucial, if not more so, than acquiring new ones.

There are several declining products in the market, often due to shifts in consumer preference or competitive pressure. A well-executed marketing campaign can be the deciding factor in a product’s success or failure. Marketing is a big factor in the promotion of any product. I have seen an example in Pakistan there one company was advertised on television before to launch their product in the market. This kind of pre-launch or “teaser” campaign builds incredible anticipation among consumers. Infact that was advertisement of milk, a blank white paper box was in the advertisement and it was showing that something is coming. After few days they played their final advertisement with the proper product name and finally they launched their product in the market. This slow reveal captured public curiosity brilliantly. There are already running milk products like Nestle, Haleeb but this new product was Olper’s tetra pack milk.

In short it’s very difficult to launch a new product in the market if you have not advertise through any media. Without that initial push, a product can easily get lost in a crowded marketplace. The first benefit of advertised product is that people demand product by itself and stockers and suppliers providing products on public demand rather than a non advertised product difficult to sale and shopkeepers and customers are not easily agree to buy that product, a lot of effort is require to sale new product in the market without advertisement. This creates a “pull” effect in the supply chain, where consumer demand dictates stocking decisions.

History of PepsiCo

In 1883 Pepsi was introduced by Caleb Braham, a pharmacist with a vision for a unique beverage. It’s amazing to think how many iconic brands started from such humble beginnings. Pepsi’s first name when it was launched “Brad’s Drink” in New Bern, North Carolina. Caleb Braham who made Pepsi at his pharmacy where the drink was sold. Later Brad’s Drink changed into Pepsi Cola. The name was derived from two of its core ingredients: the digestive enzyme pepsin and kola nuts used in the recipe. Celeb Braham sought to create a fountain drink that was delicious and would aid in digestion and boost energy. Pepsi was launched after Coca Cola or coke. It was cheaper than Coca Cola when it was launched initially, at that it was popular as poor man’s cola. This pricing strategy was a deliberate attempt to capture a different segment of the market. After that Pepsi was taken a good marketing strategy that in the advertisement Pepsi employed to celebrities. First celebrity was Barney Oldfield, the pioneer for automobile racing, whose endorsement lent the drink an exciting and modern edge.

Sodas are most frequently used items, holding a unique place in our culture. They truly have a broad appeal across different age groups and social settings. Mostly sodas are delicious, they stand between liquor and juice. Those who are too young to drink beer but think fruit juice is too juvenile can order sodas. For many, it’s a rite of passage into more “adult” beverage choices. Those too old and are putting their health at risk by drinking hard drinks can enjoy soft drinks and no one would think any less of them. Sodas have a mass appeal therefore people most demand it, especially in the summer season when you feel thrust often people demand cold soda for kill thrust.

In 1903, Bradham moved the bottling of Pepsi-Cola from his drugstore to a rented warehouse, signaling a major step up in production. This expansion was a direct response to the drink’s growing popularity. That year, Bradham sold 7,968 gallons of syrup. The next year, Pepsi was sold in six-ounce bottles, and sales increased to 19,848 gallons. In 1909, automobile race pioneer Barney Oldfield was the first celebrity to endorse Pepsi-Cola, describing it as “A bully drink…refreshing, invigorating, a fine bracer before a race.” The advertising theme “Delicious and Healthful” was then used over the next two decades. This slogan cleverly positioned the drink as both a treat and a beneficial tonic. In 1926, Pepsi received its first logo redesign since the original design of 1905. In 1929, the logo was changed again.

In 1931, at the depth of the Great Depression, the Pepsi-Cola Company entered bankruptcy – in large part due to financial losses incurred by speculating on wildly fluctuating sugar prices as a result of World War I. This period highlights the external economic vulnerabilities that can devastate even a promising business. Assets were sold and Roy C. Megargel bought the Pepsi trademark. Eight years later, the company went bankrupt again. Pepsi’s assets were then purchased by Charles Guth, the President of Loft Inc. Loft was a candy manufacturer with retail stores that contained soda fountains. He was looking for a strategic advantage in his own business. He sought to replace Coca-Cola at his stores’ fountains after Coke refused to give him a discount on syrup. Guth then had Loft’s chemists reformulate the Pepsi-Cola syrup formula. On three separate occasions between 1922 and 1933, the Coca-Cola Company was offered the opportunity to purchase the Pepsi-Cola company and it declined on each occasion, a decision that would profoundly shape the beverage industry for the next century.

In 1965, Pepsi employed another marketing strategy which was company expansion, a move that would redefine its identity. This diversification strategy was crucial for long-term stability and growth. They merged with Frito-Lay, the most popular snack brand in the world. PepsiCo was formed. This strategic merger created a powerhouse in the food and beverage industry. Pepsi took care of the beverages while Frito-lay manned the snacks. In 1966, PepsiCo settled into the Eastern European and Japanese markets. They also introduced new products; Diet Pepsi and Mountain Dew, catering to evolving consumer tastes.

Here below I am showing the most popular brands that are available at different location of the world. These brands demonstrate the company’s commitment to catering to diverse global palates.

Pepsi’s Most popular products and brands: (Something for everyone)

A new paragraph about the shift to digital marketing goes here. The evolution of marketing didn’t stop with celebrity endorsements and diversification; it entered a new frontier with the rise of the internet. While television and print were the battlegrounds for the “Cola Wars” of the 20th century, today’s competition unfolds across social media platforms, streaming services, and interactive digital campaigns. Companies like PepsiCo must now create viral content, engage with influencers, and leverage data analytics to understand consumer behavior in real-time. This digital pivot is essential for connecting with younger demographics, like Generation Z, who consume media differently and value authenticity and social responsibility from the brands they support.

Question 1: Produce a Marketing Plan

Write a marketing plan for the declining product you have analyzed using an appropriate framework.

Situation Analysis

Company Analysis

The company is gaining profit day by day, which provides a strong financial foundation for new marketing initiatives. It is the second most demanded soda drink company in the whole world. Pepsi launched some new products in the market and increased its sale and annual profit. The main problem is that people are not fully aware about new products and new products are not present in all locations therefore there is need to provide new products on all locations. This distribution gap represents a significant lost opportunity. Especially in Asian countries like Pakistan and India all products of PepsiCo are not available.

Company Goal:

Ensure high levels of associate engagement and satisfaction compared with other Fortune 500 companies. Fostering a positive work environment is directly linked to productivity and innovation. Foster diversity and inclusion by developing a workforce that reflects local communities. Encourage our associates to lead healthier lives by offering workplace wellness programs globally. Ensure a safe workplace by continuing to reduce lost time injury rates, while striving to improve other occupational health and safety metrics through best practices. Support ethical and legal compliance through annual training in our code of conduct, which outlines PepsiCo’s unwavering commitment to its human rights policy, including treating every associate with dignity and respect. Upholding these values is critical for maintaining the company’s global reputation.

Pepsi Culture:

We have a fundamental belief that people hold the key to PepsiCo’s success. Our corporate culture is built around nurturing talent from within. We are known as an academy company, a place where people grow and business leaders develop.

Strengths:

• Pepsi has a broader product line and outstanding reputation.
• Merger of Quaker Oats produced synergy across the board.
• Record revenues and increasing market share.
• Lack of capital constraints (availability of large free cash flow).
• Great brands, strong distribution, innovative capabilities. This combination is a powerful competitive advantage.
• Number one maker of snacks, such as corn chips and potato chips.
• PepsiCo sells three products through the same distribution channel. For example, combining the production capabilities of Pepsi, Gatorade and Tropicana is a big opportunity to reduce costs, improve efficiency and smooth out the impact of seasonal fluctuations in demand for particular product. Such operational synergy is difficult for competitors to replicate.

Weaknesses:

• Pepsi hard to inspire vision and direction for large global company.
• Not all PepsiCo products bear the company name, which can dilute brand recognition.
• PepsiCo is far away from leader Coca-cola in the international market – demand is highly elastic. This price sensitivity can limit strategic options in certain markets.

Customer Analysis:

Pepsi has covered a huge market, proximately more than 80 million people are involved in buying their products. The sheer scale of its customer base is a massive asset. Pepsi spending power is proximately $600 million annually. 90 percent parents say kids influence what they buy. Many work and have their own money to spend. They have proven to be brand loyal. Mostly 12 to 21 years people are in target market.

How to reach Generation “Y” ?

Creates promotions tailored to youngster needs and interests. Authenticity is crucial for connecting with this demographic. Gen Yers like entertainment and music. They like to laugh, but not at another’s expense. To attract the teen market radio and television should be used. They are internet savvy, making digital platforms an essential part of any marketing mix.

What does generation Y like?

• Free stuff and discounts.
• Contests and Drawings.
• Club cards.
• Music. Connecting with popular artists can create strong emotional ties to the brand.
• Team sporting events.
• They are into clothes and the latest styles.
• Teen friendly retail stores and internet site. A seamless online experience is non-negotiable for them.

Pepsi and Generation Y:

Pepsi targets generation Y specifically, recognizing their long-term value as consumers. Current campaigns use effective techniques to resonate with this audience. By targeting 12 to 21 years olds, Pepsi is attempting to establish loyal Pepsi drinker for life and the largest group of soft drink consumers. Cultivating this loyalty early on can pay dividends for decades.

Past Advertising Campaigns:

Michael Jackson received the biggest sponsorship from a company in 1983. In 1993 Pepsi had a “search for Michael Jackson” campaign. This campaign became a global cultural phenomenon. Used musical and sex appeal. Jeff Gordon made a commercial with Hallie Eisenberg. Sells many Pepsi collectable merchandise. Drove the Pepsi car in races. Hallie Eisenberg First appeared in a Pepsi commercial in 1998 at stage 5. She became a very recognizable face for the brand. Introduced the “Joy of Cola” campaign. Starred in commercials with Faith Hill, Kiss, and Ken Griffey Jr. Her commercials used humour. Spice Girls Promotional single “Move Over” available only through Pepsi. Used musical and sex appeal. As international stars they affected many countries. Their global reach amplified Pepsi’s message worldwide. Britany Spears February 6, 2001 Britny signed a contract with Pepsi (between $40 and $100 million). The campaign includes: 2 television commercials. Billboards. Magazines. Point of purchase. Pepsi holds a co-sponsorship of her upcoming worldwide tour. Wyclef Jean and Pepsi: A more targeted market within Gen Y: inner city urban trendsetters (12 to 21 years old). This showed a nuanced understanding of subcultures within the broader youth market. The Campaign includes: 2 TV commercials featuring Wyclef. (1st commercial premiered April 16th, 2001). Print ads. Radio promotions. Sports and fashion tie.ins. Sampling. Pepsi is Wyclef’s sponsor for his 2001 tour. Pepsi challenge.

Type A and Type B Celebrities:

A Type A celebrity is one that is well known and well liked by their target market. Tapping into their existing fanbase is a powerful shortcut to consumer trust. Example ( Britney Spears and Michael Jackson) A Type B Celebrity is one that is known by their target market. Example: Bob Dole and Hallie Eisenburg

Music:

Music is part of brand equity, creating an auditory identity for the brand. Ongoing theme and easily associated with current generation of 12 to 21 year olds.

Humor:

Use of humorous celebrities has been a consistent strategy. It makes the brand feel more relatable and down-to-earth. Put music celebrities into situation not normally seen.

Sex appeal:

Sex appeal is not only an attention getter with the current generation, but is also becoming more socially acceptable in the advertising directed toward them. This approach, however, requires careful handling to avoid controversy.

Competitor Analysis:

Market Position

Coca Cola is number one cola product in all over the world. Their brand is arguably one of the most recognized on the planet. Coca Cola’s marketing strategy is most powerful and effective. Maximum market coverage has been done by Coca Cola. It’s the result that its annual sale and profit is more than PepsiCo. This dominance presents a constant challenge for PepsiCo’s strategic planning.

Strengths

Coca-Cola has strong brand recognition across the globe. The company has a leading brand value and a strong brand portfolio. Business-Week and Interbrand, a branding consultancy, recognize. Coca-Cola as one of the leading brands in their top 100 global brands ranking in 2006. Its consistency over decades has built immense trust. The Business Week-Interbrand valued Coca-Cola at $67,000 million in 2006. Coca-Cola ranks well ahead of its close competitor Pepsi which has a ranking of 22 having a brand value of $12,690 million Furthermore, Coca-Cola owns a large portfolio of product brands. The company owns four of the top five soft drink brands in the world: Coca-Cola, Diet Coke, Sprite and Fanta. This product diversity insulates them from shifts in the popularity of any single beverage. Strong brands allow the company to introduce brand extensions such as Vanilla Coke, Cherry Coke and Coke with Lemon. Over the years, the company has made large investments in brand promotions. Consequently, Coca-cola is one of the best recognized global brands. The company’s strong brand value facilitates customer recall and allows Coca-Cola to penetrate new markets and consolidate existing ones.

Weakness

Negative publicity: The company received negative publicity in India during September 2006. Such events can cause long-lasting damage to consumer trust. The company was accused by the Center for Science and Environment (CSE) of selling products containing pesticide residues. Coca-Cola products sold in and around the Indian national capital region contained a hazardous pesticide residue. These pesticides included chemicals which could cause cancers, damage the nervous and reproductive systems and reduce bone mineral density. Such negative publicity could adversely impact the company’s brand image and the demand for Coca-Cola products. This could also have an adverse impact on the company’s growth prospects in the international markets.

Sluggish performance in North America

Coca-Cola’s performance in North America was far from robust. Even dominant companies face challenges in mature markets. North America is Coca-Cola’score market generating about 30% of total revenues during fiscal 2006. Therefore, a strong performance in North America is important for the company. North America the sale of unit cases did not record any growth. Unit case retail volume in North America decreased 1% primarily due to weak sparkling beverage trends in the second half of 2006 and decline in the warehouse-delivered water and juice businesses. Moreover, the company also expects performance in North America to be weak during 2007. Sluggish performance in North America could impact the company’s future growth prospects and prevent Coca-Cola from recording a more robust top-line growth.

Decline in cash from operating activities

The company’s cash flow from operating activities declined during fiscal 2006. This metric is a key indicator of a company’s core financial health. Cash flows from operating activities decreased 7% in 2006 compared to 2005. Net cash provided by operating activities reached $5,957 million in 2006, from $6,423 million in 2005. Coca-Cola’s cash flows from operating activities in 2006 also decreased compared with 2005 as a result of a contribution of approximately $216 million to a tax-qualified trust to fund retiree medical benefits. The decrease was also the result of certain marketing accruals recorded in 2005.

PEST Introduction

PEST Analysis is more useful when any company want to expand its business at new place or want to enter in the new countries. It provides a bird’s-eye view of the external factors that can impact a business. Main purpose is that get adjustment and business feasibility on new place. PEST analysis is a tactic that classifies effects of environment as political, economic, social, and technological features. Study of the PEST analysis method and examples related to this technique is beneficial for the development of any organization. Often the factors of legal and environment are included to modify the term to PESTLE analysis. PEST analysis ensures that the organization functioning is in accordance with the dominant influential change forces that may affect the environment of business. A thorough analysis can prevent costly strategic errors. With getting example of Pepsi expend its business with introducing some new products in the market. So every product needs to get PEST analysis before to launch in the market. Why? Because of these factors; Political, Economic, social, technology.

In the Political they need to watch that is there sustainable government in the country. Political stability directly impacts business confidence and investment. What rules and regulations government announced for business industries. What policies government announced for the control of business. Government direction regarding marketing ethics and for the point of view of consumer protection. Government economic policies. How much government has influence on religion and culture. what involvement government has in trade agreements. What laws govt announced for employment and any industry.

In the Economic there are several economic factors that need to be consider with respect to your business. These factors can determine the purchasing power of your target audience. Because these factors may be the cause of failure of any product of industry. Like Inflation, rate of interest, Per capita income, Gross domestic product, rate of exchange, economic progress trend, Economic progress trend, rate of exchange, production level, Consumer confidence and its affect on aggregate demand. For example, high inflation can erode profits and force price increases. So these factors directly hit on the progress of any product and it has directly relation with any business or any kind of product that is going to launch in the market. With respect to Pepsi, Pepsi has many talented and expert brains for using these kind of tools.

Social factors plays a vital role in the running of any business. Cultural nuances and lifestyle trends can make or break a product. So there is need to be examined these factors with carefully.

Social: The social factors influence the business at various levels, and need to be carefully examined. Neglecting these can lead to marketing campaigns that fail to resonate or even offend. These factors are:

• Leading religion.
• Attitude towards foreign goods and services.
• Influence of language on use of products in the markets.
• Time available with the consumers for leisure.
• Role of women and men in the society.
• Opinion of people on green issues.
• Demographics of the population.
• Lifestyle, education, health, fashion trends, earning capacity

Technology: Technology is commonly identified as an essential element of the organization since it is a useful tool for the attainment of market advantage. Staying ahead of the technological curve is critical for maintaining efficiency and innovation. Technology can be used, and this is affected by government support. Technological advancement can produce new industries, and also provides valuable input to service and manufacturing industries. The following are important features in this regard:

• Does technology permit the manufacture of products at economical rates, without compromising quality?
• Do the technologies present original products, like mobile telephone, internet banking, the purchase of books through internet, etc.
• Modern communication channels, like Customer Relationship Management, banners, etc

PEST Analysis of Pepsi

The PEST analysis method has been successfully applied by Pepsi, which has obtained economic advantage in its industry. Proactively analyzing these external forces allows for better strategic planning. The PEST analysis method and examples specific to Pepsi are seen in the following factors:

1. Political: The manufacture, delivery, and use of numerous Pepsi products are subject to many federal regulations, like the Food, Drug and Cosmetic Act. Navigating this complex regulatory landscape is a constant focus. The business is also governed by government and foreign rules. The international business is subjected to the political stability.
2. Economic: The products of Pepsi are influenced by the raw material yield being used in the soft drinks, juices, etc. Supply chain volatility can have a significant impact on cost of goods sold. All distribution is affected by the cost of fuel. Operations in international markets involve the study of unpredictable changes in foreign exchange rate. The economic impacts of such movements are serious because these affect the growth. Pepsi is also subjected to availability of energy, supply of money, business cycles, etc.
3. Social: Lifestyle has great influence on the use of Pepsi products, and their advertisements are designed accordingly. For example, the growing health and wellness trend has driven the development of low-sugar and zero-calorie options. Introduction of Pepsi products in the international market requires an in depth study of the local social structure.
4. Technology: Pepsi is influenced by the modern manufacturing techniques applicable to their business divisions of soft drinks, juices, and snack food. Automation and data analytics in factories can lead to significant efficiency gains. Pepsi has to focus on the latest distribution techniques, and other technological advances in their industry

References

“PEST analysis.” Guide on How to Write University Essays and Dissertations. http://university-essays.tripod.com/pest_pestel_pestle_lepest_analysis.html (accessed December 24, 2010).

“PEST Analysis.” Marketing Teacher. http://marketingteacher.com/lesson-store/lesson-pest.html (accessed December 24, 2010).

“PEST Analysis.” Net MBA Business Knowledge Center. http://www.netmba.com/strategy/pest/ (accessed December 24, 2010).

Swot Analysis Of Pepsi Co.

Strength

• Pepsi has a broader product line and outstanding reputation.
• Merger of Quaker Oats produced synergy across the board.
• Record revenues and increasing market share. This financial strength allows for reinvestment in marketing and R&D.
• Lack of capital constraints (availability of large free cash flow).
• Great brands, strong distribution, innovative capabilities
• Number one maker of snacks, such as corn chips and potato chips
• PepsiCo sells three products through the same distribution channel.
• For example, combining the production capabilities of Pepsi, Gatorade and Tropicana is a big opportunity to reduce costs, improve efficiency and smooth out the impact of seasonal fluctuations in demand for particular product.

Weakness

• Pepsi hard to inspire vision and direction for large global company.
• Not all PepsiCo products bear the company name.
• PepsiCo is far away from leader Coca-cola in the international market – demand is highly elastic. Addressing this gap in global markets is a key strategic challenge.

Opportunity

• Food division should expand internationally.
• Noncarbonated drinks are the fastest-growing part of the industry. This trend represents a massive growth area.
• There are increasing trend toward healthy foods
• Focus on most important customer trend – “Convenience”. Adapting packaging and product formats for on-the-go lifestyles is crucial.

Threats

• F&B industry is mature.
• Pepsi is blamed for pesticide residues in their products in one of their most promising emerging market e.g in India.
• Over 50 percent of the company’s sales come from Frito-Lay; this is a threat if the market takes a downturn. This reliance on one division creates a certain level of risk.
• PepsiCo now competes with Cadbury Schweppes, Coca-Cola, and Kraft foods (because of broader product line) which are well-run and financially sound competitors.
• Size of company will demand a varied marketing program; Social, cultural, economic, political and governmental constrains.

Strategies

The purpose of the strategy is to increase the EPS by 15% per annum and increase PepsiCo’s stock price. A clear financial target helps to focus all strategic efforts. There are two ways to increase the EPS, first is to increase the income and second to decrease the amount of stocks outstanding. To increase the income, there are…

Bases for Consumer Market Segmentation

There are number of variables involved in consumer market segmentation, alone and in combination. Effectively segmenting the market allows for more targeted and efficient marketing campaigns. These variables are:

• Geographic variables
• Demographic variables
• Psychographic variables
• Behavioral variables

Geographic Segmentation

In geographical segmentation, market is divided into different geographical units like regions. This allows marketing to be tailored to local tastes and preferences. A company, either serving a few or all geographic segments, needs to put attention on variability of geographic needs and wants. After segmenting consumer market on geographic bases, companies localize their marketing efforts (product, advertising, promotion and sales efforts). For instance, a promotional campaign in a cold climate might look very different from one in a tropical region.

• Regions (by country, nation, state, neighborhood)
• Population Density (Urban, suburban, rural)
• City size (Size of area, population size and growth rate)
• Climate (Regions having similar climate pattern)

Demographic Segmentation

In demographic segmentation, market is divided into small segments based on demographic variables like age and income. These factors are often the easiest to measure and provide a clear snapshot of the customer. Consumer needs, wants, usage rate these all depend upon demographic variables. So, considering demographic factors, while defining marketing strategy, is crucial.

• Age
• Gender
• Income
• Occupation
• Education
• Social Class
• Generation
• Family size
• Family life cycle
• Home Ownership
• Religion
• Ethnic group/Race
• Nationality

Psychographic Segmentation

In Psychographic Segmentation, segments are defined on the basis of social class, lifestyle and personality characteristics. This gets to the ‘why’ behind consumer choices. Psychographic variables include:

• Interests
• Opinions
• Personality
• Self Image
• Activities
• Values
• Attitudes

A segment having demographically grouped consumers may have different psychographic characteristics. Understanding these differences is key to creating messaging that truly resonates.

Behavioral Segmentation

In this segmentation market is divided into segments based on consumer knowledge, attitude, use or response to product. It focuses on how consumers interact directly with the product. Behavioral variables include:

• Usage Rate
• Product benefits
• Brand Loyalty
• Price Consciousness
• Occasions (holidays like mother’s day, New Year and Eid)
• User Status (First Time, Regular or Potential)

Behavioral segmentation is considered most favorable segmentation tool as it uses those variables that are closely related to the product itself. It provides very actionable insights for marketing teams.

Bases for Business Market Segmentation

Business market can be segmented on the bases consumer market variables but because of many inherent differences like businesses are few but purchase in bulk. The B2B sales cycle is often much longer and more complex. Evaluate in depth. Joint decisions are made. Business market might be segmented on the bases of following variables:

• Company Size: what company sizes should we serve?
• Industry: Which industry to serve?
• Purchasing approaches: Purchasing-function organization, Nature of existing relationships, purchase policies and criteria.
• Situational factors: seasonal trend, urgency: should serve companies needing quick order deliver, Order: focus on large orders or small.
• Geographic: Regional industrial growth rate, Customer concentration, and international macroeconomic factors

Marketing Mix

Price, Place, Product and Promotion are the four pillars of a successful strategy. Remember that you are working with an existing company that has set objectives and missions. Any new plan must align with the broader corporate vision. You will need to align your product to the company’s objectives. Please be sure to include a sample of advertising (using a medium or media of your choice) which supports your plan. Sponsoring to different charity shows, arranging different musical concerts sponsor by Pepsi, awarding shows like best performance awards to different actors sponsor by Pepsi. These activities build positive brand association in the minds of consumers. It gives good impact on the people’s mind. I often seen that some cricket matches or sports sponsored by the Pepsi. Lot of ways which you can boost your product and give challenge to your competitor.

In short I would like to give preference to advertise by media, because media is now everywhere, TV channels, Radios, Newspapers, Magazines and much more. An integrated media approach ensures the message reaches the widest possible audience. YouTube is big bank and now few advertisement are on YouTube. Pepsi needs to introduce some of its new products and their advertisement on YouTube. Digital video advertising is a powerful tool for capturing attention. Last night I listen some famous songs on YouTube and before to start song an advertisement of company was there, like Cashforphones.co.uk advertisement was on YouTube. Everyone is not visiting Pepsi’s website and everyone is not fully aware with the Pepsi’s products. Therefore there is need to give awareness to people during their activities, like during watching TV or sitting on internet, means we need to find the things in which people most frequently come and use and there we need to give advertisement of products. Meeting consumers where they are is the essence of effective modern marketing. After get awareness of products people will automatically demand on selling points that we need Pepsi’s products. Retailers, wholesalers and everyone (supply chain) will maintain that new products at their locations because of public demand of that product.

Conclusion

The Pepsi-Cola drink was invented in 1898 and grew basically by following the Coca-Cola marketing, product, and distribution strategies. Learning from a successful competitor is a common and effective business strategy. Like Coca-Cola it advertised as heavily as finances permitted, and was distributed through soda fountains and franchised bottlers.

Assessing Pepsi’s marketing strategies; It is clear that Pepsi has made several right choices. The company’s willingness to adapt and innovate has been a key factor in its longevity. With the existence of Coke, Pepsi took advantage of their late entry into the market by lowering their prices. Before it entered the international market, it first familiarized its customers with its product thoroughly in its home base. By the time Pepsi was ready to enter the international market, it had a good grasp of what its target audience really is. This foundational knowledge was critical for its global expansion.

In conclusion, Pepsi’s marketing strategies, from past to present included: enhancing their distribution system, knowing the environment of the foreign market and finding the things their target buyers had in common, adding new innovations and products while improving the old products, imaginative advertising, use of advanced technology, assertive promotions , trendy, socially-aware campaigns, alliances with major corporations and expansion into other industries such as restaurants. This multi-faceted approach demonstrates a sophisticated understanding of modern marketing. Even Pepsi’s response. So, in effect, Coca- Cola’s massive fame has also rubbed off on its rival. The constant competition has pushed both companies to be better. It even isolated these two beverage companies from other soft drink brands.

References

Grewal, D., Krosch, A. R., & Munger, J. L. (2022). The future of marketing: The power of purpose, connection, and technology. Journal of the Academy of Marketing Science, 50(1), 1-10. https://doi.org/10.1007/s11747-021-00821-1

Moreira, A. C., Kastenholz, E., & Al-Talab, M. S. (2020). The role of brand strategies and online reviews on the marketing performance of the top 100 worldwide brands (Coca-Cola, Pepsi, and Red Bull). Journal of Brand Management, 27(5), 583–597. https://doi.org/10.1057/s41262-020-00201-4

Sheth, J. (2021). New areas of research in marketing strategy, consumer behavior, and marketing analytics in the new normal. Journal of Macromarketing, 41(2), 180–184. https://doi.org/10.1177/02761467211000782

Teng, S., & Khong, K. W. (2021). Examining the effects of celebrity endorsements in advertising. Journal of Promotion Management, 27(4), 556-579. https://doi.org/10.1080/10496491.2020.1856163